Could Dixons Carphone shares be worth just 55p?
19th September 2018 08:45
by Alistair Strang from Trends and Targets
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The high street bloodbath continues and this electronics retailer has certainly felt the shock waves. Chartist Alistair Strang examines the trend lines for a potential recovery.
Dixons Carphone (LSE:DC.)
Companies in the UK retail field, broadly speaking, continue to flourish in a fashion which suggests the field has been sprayed with weedkiller. Even Marks & Spencer appears to be catching a bit of a cold presently.
Dixons Carphone looks like embracing the collective retail misery. The immediate situation is pretty grotty as price movements below 158p calculate as provoking discount down to an initial 110p.
By any standards, this is pretty alarming but the strange thing comes from our calculated secondary.
Should the price continue to weaken below 110p, we've two quite separate formulas giving a secondary drop target of 55p. This is quite odd as while it suggests the price will rather neatly halve, the two formulas are working their magic against quite different timeframes of DC's decline. The implicit suggestion therefore is of the market itself already aiming for reversal to such a ridiculous level.
A glance at the blue line on the chart does confirm since the start of 2016, a very deliberate downtrend has been enacted against the share price. In addition, several manipulation nudges are circled, always forcing the price downward.
At present, the share requires better than 197.635p just to suggest the immediate downtrend has eased. A recovery such as this will allow an initial 222p with secondary, if bettered, at 241p.
For now, we're pretty nervous, but in the event of 55p ever making an appearance, it seems a long position should prove viable.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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